Emerging market concerns – particularly the escalation of the Ukraine crisis – continued to make headlines in February, according to Tradeweb.

Data from the Bank for International Settlements shows that European banks had loaned USD3.4trn to developing countries as at end of September 2013.

In cash credit, January’s selling trend in the secondary market was reversed in February across all sectors except senior banks/financials, as parameters for this year’s EU-wide stress tests are taking shape.

The industry is also facing a comprehensive quality assessment by the European Central Bank in the coming months, while new Federal Reserve rules approved on 18 February will subject overseas banks with a significant US presence to the same capital, risk management and liquidity standards as
their local counterparts.

After a bout of emerging market-related weakness in January, CDS index spreads marched into tighter territory in February, with the Crossover tightening 65 basis points on the month to close at 259 basis points. Similarly, the Main index tightened steadily throughout February; it failed, however, to break through the 70 basis points support level. Financial indices performed in line with 17 basis points of tightening for the FinSen, which closed at 87 basis points, and 13 basis points of Sen/Sub compression.

In the utilities sector, Centrica announced its 2013 preliminary results on 20 February. The British Gas owner unveiled a two per cent fall in operating profit, largely due to rising costs, unusual weather patterns on both sides of the Atlantic, and households switching to other energy suppliers. Mid asset swap spreads for the company’s bond maturing in 2018 widened from 66 to 70 basis points in February.

In high yield, Peugeot confirmed on 19 February a deal to raise EUR3bn from China’s Dongfeng Motors and the French state, after reporting an annual net loss of EUR2.3bn. On the same day, mid-asset swap spreads for its five-year bond reached their lowest level since launch at 248 basis points, and ended the month 61 basis points tighter from 3 February.